Contrasting White Mountains Insurance Group (NYSE:WTM) & Root (NASDAQ:ROOT)

White Mountains Insurance Group (NYSE:WTM) and Root (NASDAQ:ROOT) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Risk and Volatility

White Mountains Insurance Group has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Root has a beta of 2.54, indicating that its share price is 154% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for White Mountains Insurance Group and Root, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
White Mountains Insurance Group	0	0	0	0	N/A
Root	0	4	4	0	2.50

Root has a consensus target price of $53.38, suggesting a potential upside of 42.14%. Given Root’s higher possible upside, analysts plainly believe Root is more favorable than White Mountains Insurance Group.

Profitability

This table compares White Mountains Insurance Group and Root’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
White Mountains Insurance Group	21.40%	7.62%	3.88%
Root	-9.81%	-50.80%	-6.08%

Earnings and Valuation

This table compares White Mountains Insurance Group and Root”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
White Mountains Insurance Group	$2.30 billion	1.90	$509.20 million	$221.04	7.70
Root	$854.20 million	0.65	-$147.40 million	($7.77)	-4.83

White Mountains Insurance Group has higher revenue and earnings than Root. Root is trading at a lower price-to-earnings ratio than White Mountains Insurance Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

88.7% of White Mountains Insurance Group shares are held by institutional investors. Comparatively, 59.8% of Root shares are held by institutional investors. 3.0% of White Mountains Insurance Group shares are held by insiders. Comparatively, 11.7% of Root shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

White Mountains Insurance Group beats Root on 9 of the 13 factors compared between the two stocks.

About White Mountains Insurance Group

White Mountains Insurance Group, Ltd., through its subsidiaries, provides insurance and other financial services in the United States. The company operates through HG Global/BAM, Ark/WM Outrigger, Kudu, and Other Operations segments. The HG Global/BAM segment provides insurance on municipal bonds issued to finance public purposes, such as schools, utilities, and transportation facilities, as well as reinsurance protection services. The Ark/WM Outrigger segment offers reinsurance and insurance, including property, marine and energy, accident and health, casualty, and specialty products. The Kudu segment provides capital solutions to boutique asset and wealth managers for generational ownership transfers, management buyouts, acquisitions and growth finances, and legacy partner liquidity, as well as strategic assistance to investees. The Other Operations segment offers insurance solutions to travel industry through broker channel and on a direct-to-consumer basis; and manages separate accounts and pooled investment vehicles for insurance-linked securities sectors, including catastrophe bonds, collateralized reinsurance investments, and industry loss warranties of third-party clients. White Mountains Insurance Group, Ltd. was incorporated in 1980 and is headquartered in Hamilton, Bermuda.

About Root

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. It operates a direct-to-consumer model; and serves customers primarily through mobile applications, as well as through its website. The company's direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. Root, Inc. was incorporated in 2015 and is headquartered in Columbus, Ohio.